The International Energy Agency (IEA) on Tuesday trimmed its global oil demand forecast for this year as fresh COVID-19 lockdowns cloud the outlook, but said that mass vaccination programs should help bolster a second-half rebound.
“Global oil demand is expected to recover by 5.5 mb/d [million barrels per day] to 96.6 mb/d in 2021, following an unprecedented collapse of 8.8 mb/d in 2020,” the IEA said in its latest monthly report.
“For now, a resurgence in COVID-19 cases is slowing the rebound, but a widespread vaccination effort and an acceleration in economic activity is expected to spur stronger growth in the second half of the year,” it said.
Photo: Reuters
“This recovery mainly reflects the impact of fiscal and monetary support packages, as well as the effectiveness of steps to resolve the pandemic,” it added.
The IEA said that it now expected demand in the first quarter of this year to be 0.6 million barrels per day less than previously forecast, with the full-year outcome revised down by 0.3 million barrels per day.
On the supply side, the IEA said that after “falling by a record 6.6 mb/d in 2020, world oil supply is set to rise by over 1.0 mb/d this year.”
“There may be scope for higher growth given our expectations for further improvement in demand,” the IEA added.
It said that its forecasts assume that in the second half of this year, OPEC+ — OPEC members plus non-cartel producers, principally Russia — would continue to rein in output, withholding 5.8 million barrels per day of oil from the market in line with their agreement in April last year.
The IEA said that OPEC+ has recently adopted a more flexible stance and would be meeting regularly to assess output levels.
Oil prices have risen in recent weeks on hopes the global economy would get back on track later this year.
The IEA said these higher prices could “provide an incentive to increase production by the US shale industry, which saw the biggest fall in output last year.”
However, shale producers appear set to stick with promises to keep output largely flat so as not to jeopardize prices.
“If they stick to those plans, OPEC+ may start to reclaim the market share it has steadily lost to the US and others since 2016,” the IEA said.
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RSS